Lioness Associates, Inc.

Economic & Corporate Risk/Yield Reports

December 4, 2012 - Perspectives on USA Economy for January 2013

In December 2012, delta core had lost momentum and was sloping down — in January 2013, the core stays pretty much on the equilibrium point and does not progress far into risk. Delta transient, on the other hand, does move into risk in December 2012 and as seen in the January 2013 time frame, moves back towards equilibrium.  One way or the other, the fiscal cliff will be resolved (core) — whether the automatic cuts do it or some agreement is reached before the deadline is yet to be seen.  The problem is likely to be the short term reactions of US citizens/companies as they see their government stalled.  An example of this is the moving up of corporate dividends into the 2012 year.

Once the fiscal cliff is past — the debt ceiling is likely to come into play during the February/March 2013 timeframe (transient momentum move into risk).

Once the fiscal cliff and the debt ceiling are dealt with and moved past, there is a good possibility that the USA economy will surge during 2013. This is indicated by the momentum move into yield during the first part of the year.